Tax-Free Financial savings Account (TFSA) traders get tempted by huge yields when the mathematics seems so clear. They put money in, acquire revenue, and repeat. However yield is usually a entice inside a TFSA because the market typically palms out the very best payouts proper earlier than a lower. When a dividend drops, you lose revenue, and also you typically lose the share worth too. Do that as a substitute: purchase a enterprise with demand progress and rising money movement, then let it compound tax-free. That’s why I’d think about this dividend inventory in the present day.
MDA
MDA Area (TSX:MDA) suits that “don’t chase yield” thought because it’s constructed round long-cycle demand, not shopper moods. It designs and builds satellite tv for pc techniques, area robotics, and geo-intelligence options. In brief, it makes instruments that assist governments and firms see Earth, transfer knowledge, and function in orbit. It seems related now as defence priorities, local weather monitoring, and broadband constellations maintain drawing capital, and Canada needs home functionality in strategic know-how.
During the last 12 months, the information movement proved that even nice themes include sharp edges. In September 2025, EchoStar terminated a serious low-Earth-orbit satellite tv for pc contract, and MDA pointed to a sudden shift in EchoStar’s technique tied to spectrum discussions and a deliberate spectrum sale. That form of shock can hit sentiment quick as traders deal with backlog like a security blanket. It additionally forces administration to point out that demand is broader than one marquee buyer.
The story improved quickly after. In December 2025, the Canadian Area Company awarded MDA an preliminary contract tied to a RADARSAT Constellation Mission replenishment satellite tv for pc, and the corporate mentioned the total mission contract is anticipated to be awarded in 2026, topic to approvals. That reinforces MDA’s function in Canada’s area industrial base. It additionally provides a government-linked work stream that may run for years, which helps easy out private-sector ups and downs.
Extra to return
MDA additionally pushed to deepen its “construct extra in-house” benefit. It accomplished the acquisition of SatixFy in July 2025, bringing satellite tv for pc communications chip know-how into the corporate to strengthen its end-to-end providing for digital constellations. Integration can get messy, however vertical functionality can cut back provider bottlenecks and help differentiated merchandise as prospects push for extra software-defined satellites and better throughput.
Current earnings present why the market retains giving it the advantage of the doubt. Within the third quarter (Q3) of 2025, it reported income of $409.8 million and adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) of $82.8 million, ending the quarter with $4.4 billion of backlog. That scale helps profitability as manufacturing ramps, and the backlog supplies visibility that many industrial companies would like to have.
Wanting into 2026, traders ought to give attention to execution towards clear targets. Administration guided to a 2025 adjusted EBITDA of $305 million to $320 million, with margins round 19% to twenty%, which units a sensible benchmark for working self-discipline. If it retains changing backlog with out price overruns, the story shifts from “area hype” to repeatable industrial progress. If conversion stumbles, the inventory can re-rate rapidly as a result of giant applications slip and the market hates surprises.
Silly takeaway
Might or not it’s a purchase for others? It may, in order for you TFSA safety that comes from demand that doesn’t depend on buyers feeling flush, and from contracts that may run for years. It may be the unsuitable match should you want a easy trip, as a result of one delayed launch or one cancelled program can whipsaw sentiment. For 2026, the outlook comes right down to backlog replenishment and constant margins as initiatives transfer from promise to manufacturing. If it nails each, you might not miss the excessive yield in any respect.